US imposes more sanctions against Russia

The Obama administration moved on Wednesday to broaden sanctions against Russia’s banking, energy and defense sectors for the Kremlin‘s intervention in Ukraine, saying the country has failed to take steps to deescalate the conflict.

Ukrainian army paratroopers move to position in Slovyansk, Ukraine, Saturday, May 31, 2014.
AP

The Obama administration moved on Wednesday to broaden sanctions against Russia’s banking, energy and defense sectors for the Kremlin‘s intervention in Ukraine, saying the country has failed to take steps to deescalate the conflict.

“We’ve made it clear time and again if Russia does not respect Ukraine’s sovereignty, we’d move to impose additional costs and that’s what we’re doing today,” a senior administration official said.

The move comes as new videos have emerged that appear to show multiple rockets being launched into eastern Ukraine from Russian soil, which would represent a serious deepening of the crisis. The administration has been pressing Russia to close the border that has allowed the transfer of heavy weapons from Russia to pro-Russian separatists and to encourage separatists to abide by a ceasefire proposal. But White House officials said the Kremlin has refused to take the steps.

The sanctions are “broad-based” and target financial services, energy and defense sectors, along with senior Russian officials, an administration official said.

The banks targeted include some of Russia’s largest and they will no longer to be able to access U.S. capital markets, the official said.

The Treasury-imposed sanctions prohibit U.S. persons from providing new financing to two major Russian financial institutions (Gazprombank OAO and VEB) and two Russian energy firms (OAO Novatek and Rosneft), limiting their access to U.S. capital markets.

Other entities sanctioned include eight Russian arms firms, which Treasury said are responsible for the production of a range of materiel that includes small arms, mortar shells, and tanks. It also designated the “Luhansk People’s Republic” and the “Donetsk People’s Republic,” which have asserted governmental authority over parts of Ukraine without the authorization of the Government of Ukraine; and Aleksandr Borodai, the self-declared “prime minister” of the Donetsk People’s Republic, for threatening the peace, security, stability, sovereignty, and territorial integrity of Ukraine.

Treasury designated Feodosiya Enterprises, a key shipping facility in the Crimean peninsula, saying it was “complicit in the misappropriation of state assets of Ukraine” and designated four Russian government officials, including Sergey Beseda, a senior Russian Federal Security Service official.

“Russia has continued to destabilize Ukraine and provide support for the separatists, despite its statements to the contrary,” said Under Secretary for Terrorism and Financial Intelligence David S. Cohen.

White House officials said the sanctions have taken a bite out of Russia’s economy, include stalling its stock market.

“We expect the steps we’ve taken today.. will only exacerbate that situation,” another official said.

Officials said Russia still has an “exit ramp” to avoid the sanctions.

A senior administration official said the recent friction between the U.S. and Germany over reports of NSA spying had “no effect whatsoever” on Europe’s support for sanctions and that German chancellor Angela Merkel has been at “the forefront” in pushing for sanctions against Russia’s intervention.